Following the discount rate decrease, Ukrainian bonds’ yield fell as well.

At the first auction, after the NBU decided to lower the discount rate, the Ministry of Finance lowered rates for OVDP by 20-30 basis points. The secondary market also reacted by lowering rates for hryvnia securities, noted the Head of Corporate Analysis at the ICU, Oleksandr Martynenko.

He suggests that this is just the beginning and that yields will continue to move downward, leading to increased competition among banks for the instruments offered by the Ministry of Finance.

At the same time, solid support for Ukrainian sovereign debt came from the IMF’s statement approving the program’s third revision. The improvement in the IMF’s forecasts regarding the dynamics of Ukraine’s public debt added significant optimism and strengthened investors’ hopes for less stringent Eurobond restructuring terms.

In addition, after the US annual budget was approved, aid to Ukraine became more realistic, which improved the mood even more.

Last week, the prices of Ukrainian Eurobonds increased by an average of 10% to the range of  ¢30- ¢38 per dollar. The price of GDP warrants increased by 2% to more than  ¢48 per dollar.